Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Acknowledged
We were concerned that some energy customers have been disproportionately affected by the energy crisis.
Conclusion
We were concerned that some energy customers have been disproportionately affected by the energy crisis. For example, we noted that some vulnerable customers rely on prepayment meters but it costs more to administer the cost of energy paid by prepayment than by direct debit, which is reflected in the prices these customers pay. Some vulnerable 40 C&AG’s Report, para 2.14; Ofgem, Ofgem updates price cap level and tightens up rules on suppliers | Ofgem, Press release, 26 August 2022 41 Qq 87–89 42 Q 59 43 Q 21 44 Q 60 45 C&AG’s Report, para 3.23 46 Qq 55, 59–60 47 Ofgem, Ofgem confirms changes to the price cap methodology and frequency ahead of new rate to be announced later this month, Press Release, 4 August 2022 Regulation of energy suppliers 15 customers are therefore having to cope with the increase in wholesale prices this year, while at the same time also paying extra on top of that due to their method of paying for energy.48 Other groups of customers have also been disproportionately affected by the crisis. For example, energy provided through district heating systems, where heat is distributed to surrounding homes from a central source, is not covered by the price cap and customers are therefore not protected from price rises.49
Government Response Summary
The government acknowledges that some energy customers have been disproportionately affected by the energy crisis and states it is using all available levers to ensure vulnerable customers benefit, highlighting the EBSS and alternative funding.
Government Response
Acknowledged
HM Government
Acknowledged
5.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 5.2 The government is committed to using all the levers available to it to make sure that vulnerable customers benefit from the energy support available to them. Under the Energy Bills Support Scheme (EBSS), households have started to receive £400 off their energy bills since October 2022, with the discount made in six instalments. This is being delivered via energy suppliers. 5.3 Ofgem provides the compliance and enforcement framework for EBSS and monitors energy suppliers’ compliance with this. Ofgem is acting swiftly to resolve any compliance concerns, in line with its duties under relevant supplier licence conditions, to ensure customers are receiving what they are entitled to. 5.4 Suppliers have confirmed that vouchers have been sent to all two million customers with traditional prepayment meters (PPMs). The department is urging consumers to redeem vouchers via a communications campaign targeted specifically at traditional PPM users; this includes posters, social media posts and radio broadcasts to ethnic minority radio stations in different languages, as well as communications direct from suppliers to customers. 5.5 The government continues to monitor voucher redemption rates through supplier reporting and will work with suppliers to ensure they are taking action to contact those with unredeemed vouchers and to reissue lost vouchers. The government is also working with the Post Office, PayPoint, consumer groups and charities to ensure that they carry and transmit accurate information about EBSS. 5.6 Vulnerable customers who are not eligible for EBSS, due to not having a direct relationship with an electricity supplier, such as park home residents, may be eligible for the Alternative Funding announced in July 2022. The government is undertaking key work with a range of stakeholders to finalise the details regarding eligibility and process, to ensure payment this winter. 5.7 In addition, households continue to be supported by the Energy Price Guarantee (EPG). This government scheme will bring a typical household’s energy bill in Great Britain down to the equivalent of around £2,500 per year (for the period of 6 months) from 1 October 2022 to the end of March 2023. The EPG will save a typical household in Great Britain £900 in the winter of 2022-23.